Peter Jackson and New Line have kissed, made-up, and decided on a trip back to Middle Earth. Jackson will be exec producing The Hobbit with Fran Walsh. But... he won't be directing. The Hobbit, which is the prequel to Tolkiens' Lord of the Rings trilogy, will be split into two films and both are going to be shot simultaneously.

MGM and New Line will co-finance and co-distribute the film, with New Line distributing in the US, and MGM internationally. The announcement came with the news that Jackson and New Line have settled their court matters over royalties involved with the Rings trilogy. No details were given, but all seems to be well - Jackson's one time nemesis at New Line, Bob Shaye, said, "We are pleased to solve our differences, as we know Jackson and his team will bring the same care and talent to these films as they did with the original trilogy."

So far, the original trilogy has grossed over 3.5 billion dollars globally. In 2003 The Return of the King swept the Oscars with 11 wins. An unprescedented accomplishment for a fantasy film.

There's no word yet on casting for The Hobbit. But having Jackson on board makes it much more likely that original cast members will return.

Since Jackson will not be directing, who's going to step in? Sam Raimi has expressed interest in the past, but said he'd only do it if Jackson were involved. Now that he is, does that mean it paves the way? The knock on effect would be that Spiderman 4 was forced to find a new director. Raimi is still an amazing talent, despite Spiderman 3, but I just can't imagine Hobbits, Elves, Middle Earth, or any of it without Jackson calling the shots. Can you?

If they stick to the story, The Hobbit films will be better than the Lord of the Rings, Beorn alone is fantastic and is my favourite fictional character of all time.

At first I was concerned about Jackson Producing and not Directing, but if Sam Raimi steps up to the plate he will do an incredible job, he is one of my favourite directors and he deserves a shot at turning this wonderful story into movie gold.